By this time next year, many of downtown Indiana’s traditional outdoor activities — and possibly some new events — will be celebrated in and around the borough’s new “people place,” IRMC Park.

The plaza-like setting with trees and tables and benches along the first block of North Seventh Street is one of three key features included in Phase B2 of the Indiana Economic Development project, also referred to as Renaissance Indiana or Indiana’s streetscape enhancement project, getting under construction this week.

The other two major components will be a rebuilding of the crumbling Vinegar Hill Steps, believed by some to be roughly a century old, and replacement of the leaning retaining wall along Water Street across from the parking garage.

Renaissance Indiana is a collaboration between Downtown Indiana Inc., Indiana Borough, Indiana County and Indiana University of Pennsylvania. The project’s goal is to create an attractive, welcoming environment that supports economic development and improves the quality of life.

The project began in 2005 and Phase A improvements along the 900 block of Philadelphia Street were completed in 2009. Phase B1 enhancements were finished last year along the 500 block of Philadelphia Street.

As with the previous phases, the work starting this week along North Seventh Street will add new sidewalks and street curbs, crosswalk upgrades, new decorative lighting, new trees and other landscaping improvements, benches and other amenities. It will also move overhead utilities underground and out of sight.

Hastie Kinter, chairwoman of Renaissance Indiana, told a gathering downtown prior to a ceremonial ribbon cutting for B2 that the enhancement project started with community meetings where participants discussed what they wanted to see included among downtown improvements. The concept of a “people place” was mentioned often in those early planning sessions, she said. Kinter is an officer with Indiana Printing and Publishing, which owns The Indiana Gazette.

One traffic lane and some parking spaces will be eliminated on North Seventh Street to make more room for the community gathering place.

Kinter said Downtown Indiana Inc. held a capital campaign to raise its share of the seed money for the project, and Indiana Regional Medical Center was a major donor to the drive and purchased the naming rights to the new plaza-like area. An arch over the entrance to North Seventh Street from Philadelphia Street will let motorists and pedestrians know they’re entering IRMC Park.

“We could not be where we are today without the commitments of organizations like IRMC,” Kinter said. “We’re extremely excited to see that arch go up by the end of the year.”

The project is also being partly funded by Community Development Block Grants through the Pennsylvania Department of Community and Economic Development.

Rod Ruddock, chairman of the Indiana County commissioners, said he’s been told that DCED officials consider Indiana’s downtown streetscape enhancements one of the best projects of its kind in the state because of its efficient use of the state dollars available.

EG&G, an Akron, Ohio-based firm designing the Philadelphia Street enhancements, also helped secure funding for the project as a public-private partnership.

State Rep. Dave Reed, R-Indiana, and Sen. Don White, R-Indiana, are also credited with doing much to secure state funding for the work.

“We’re very blessed to have a vibrant downtown” and the support of local business owners, Reed said. “There are very few downtowns (around Pennsylvania) today surviving, let alone thriving” like downtown Indiana, he said.

“I represent all or parts of five counties and I don’t have a downtown (elsewhere in the 40th District) even close to this,” White said of Indiana. “Everybody (gathered for the ribbon-cutting ceremony) at one time or another has done some lifting on this project,” and the enhancements will have a positive effect on generations to come, he said.

Dave Fairman, Indiana’s public works director, said some traffic and parking restrictions for the safety of contractors could begin by the end of this week along North Seventh Street and continue until Phase B2 is completed about the end of the year.

Gov. Tom Corbett in February approved $3.5 million in grant money that will pay for much of the downtown improvements coming in Phase C, the final segment of the project. That last phase will encompass the 600, 700, and 800 blocks of Philadelphia Street. Improvements along those blocks likely will not start until 2014 or later.